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Shanghai shares gain on news of currency inflows
Aggregated Source: Shanghai Daily: Business

SHANGHAI stocks advanced this morning after data showed foreign inflows to China accelerated in April, fueling optimism over market liquidity.

The key Shanghai Composite Index rose 0.98 percent, or 21.77 points, to 2,246.57. Turnover was 51.4 billion yuan (US$8.4 billion) by the noon break.

China purchased 294.4 billion yuan of foreign exchanges in April, up from 236.3 billion in March, the People's Bank of China said yesterday.

"Market liquidity remains sufficient with rising influx of foreign currencies," said Jiang Chao, an analyst at Haitong Securities.

"Although Chinese regulators have introduced a set of rules to control the large inflow of hot money, they are unlikely to tighten monetary policy due to weak economic growth," said Jiang.

Funds outstanding for foreign exchange in domestic financial institutions increased 1.51 trillion yuan in the first four months this year, compared with 494.6 billion yuan for the whole of 2012, the central bank said.

Brokerages gained among financials. Founder Securities Co increased 2.2 percent to 7.37 yuan. Citic Securities, the biggest listed brokerage, rose 2.2 percent to 12.54 yuan. Haitong Securities Co added 3.1 percent to 10.97 yuan.

Property developers also advanced. Poly Real Estate, the second largest developer, climbed 2.2 percent to 11.83. Gemdale Corporation jumped 4.1 percent to 7.37 yuan.

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